https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt Kraft and Heinz en-us 2020-08-04 15:55:03 UTC 2025-11-15 03:48:30 UTC hello@padlet.com sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669187167 The deal between Kraft foods and H.J. Heinz was a merger to create a new company named Kraft Heinz.

]]> 2020-08-04 15:56:32 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669187167 sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669256388 The target was kraft foods and acquirer was heinz which was owned by 3G and warren buffet. Heinz was taken private by these 2 in 2013 and Kraft was a publicaly listed company. For the merger to happen the team behind Heinz had to sweeten the deal for the shareholders of kraft with a one time 16.5$ dividend per share which was about 1/4th the stock value. ]]> 2020-08-04 16:59:10 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669256388 sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669258935 Both of them belong to food processing industry though kraft is into snacks and heinz is known for its sauces. It is important to note none of their respected brands competed directly against each other. Hence this is a horizontal merger. ]]> 2020-08-04 17:01:23 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669258935 sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669259987 The deal was values around $45 - $50 bn, with the expected combined company revenue of ~ $28 bn]]> 2020-08-04 17:02:24 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669259987 sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669262159 Initially the stock price (Kraft) went up as the reaction to the deal was largely positive. The stock price moved from $61.33 to $83.17 on the next day of announcement, an increase of approx. 35.61% in a day !
But soon after, it started declining in October,2017 after reaching a peak of $97.77 to 37$ (as of 4th August 2020) . This decline was largely due to dropping sales which is said to have happened primarily because of heavy cost cutting through a model used by 3G called zero base budgeting .
Also, the due to too much focus on cutting cost, it lost focus and pace with the changing consumer needs.

]]> 2020-08-04 17:04:25 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669262159 sahilgupta363 https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669263181  To consolidate , cut costs and mutually benefit from market reach (international growth).
Heinz -Global footprint (60% outside north America)
                  +
Kraft - 98% sales from north America
                  =
           Global Reach

Also, due to high credit worthiness of Kraft, refinancing of the entire company was possible in line with their goal of cutting cost]]> 2020-08-04 17:05:24 UTC https://padlet.com/sahilgupta363/zvq8zkgggxhezzpt/wish/669263181